Mr Kennedy, in his first speec to the conference as leader, urged the party to be "bolder" in its approach to the environment and back calls to impose a five-year moratorium on growing GM crops for commercial use.
In a personal attack on Tony Blair, he said the Prime Minister had failed to quell "the legitimate public anxiety" over the controversial science. "Science should be a servant of society. It must never be a master of society. After the disastrous handling of this issue the public do not even trust `trust me Tony'," Mr Kennedy said.
He stressed that environmental issues should be "an absolutely fundamental issue" for the party. "It has always been central but we have to go further. We have to be bold in our approach," he said.
However, Mr Kennedy faced criticism from several activists who warned the party not to let "hysteria triumph over common sense and scientific evidence".
Tim Farron, of Westmoreland and Lonsdale, spoke of the "wilful and incorrect" information that had characterised the debate during the past two years. "A moratorium would be an unnecessary and unworthy concession to tabloid hysteria," he added.
But the party later backed the new policy motion to protect organic and other non-GM crops in neighbouring fields by subjecting them to much bigger isolation distances. They should also be monitored by independent assessors rather than biotechnology companies running the experiments. The motion called for a statutory legal liability without time limitation on the producers of GM products for any adverse health or environmental effects.
Earlier, delegates backed an emergency motion on the British farming crisis.